Case Study:
Cokins begins this week by stating that "CIOs want to make sure that their executive teams look at the value of a customer from a lifetime perspective" (Cokins, 2011). Customers influence the profitability of the organization, and the happier the customers are, the more likely they will be to continue in the partnership. He lists 5 forces that require the supplier to focus more and more on the customer: customer retention, a shift in the course for competitive advantage, one-to-one marketing, expanded product diversity, and power shift to customers.
The CIO must be prepared with various strategies that include:
· Identifying, understanding, and addressing the best (and worst) customers
· Targeting and selling existing products and services to existing customers
· Targeting prospective customers with similar profiles as your most valuable customers
(Cokins, 2011).
The CLV (customer lifetime value) is defined as the "net present value of the likely future net positive cash flow stream from an individual customer" (Cokins, 2011). Simply speaking, it evaluates and determines the amount of business the customer will bring to the organization. CLV focuses on the customer, and not the products or services offered by the organization.
The CIO needs to work with and support the CMO in marketing, sales initiatives, and metrics.
Chad Latz says that c-suite officers "want measurement outcomes that can impress the audiences that matter most to them, whether it is the board of directors or the investor community" (How do you work, 2012). He continues his interview by stating that digital and social media offer the much-needed platforms for measuring and tracking the vast amount of data that is captured.
Bill Ogle states that it is "crucial to constantly examine various metrics that demonstrate how consumers experience and interact with" (How do you work, 2012) the products and company.
Eve Stevens believes that communication is the way to approach the problem. She says "communication pro must remember the fundamentals of business excellence - we must be able to articulate what we are trying to achieve and then be able to repeat it" (How do you work, 2012).
References
Cokins, G. (2011). How to Measure and Manage Customer Value and Customer Profitability. In J. Stenzel, CIO Best Practices: Enabling Strategic Value with Information Technology (pp. 237-279). Hoboken, NJ, USA: John Wiley & Sons, Inc.